Court ruling points to recent activity in federal investigation into Ken Paxton – Houston Public Media

A federal appeals court last week rejected an attempt by an unnamed Texas agency to withhold records and prevent its employees from appearing before a grand jury in a federal investigation that appears to target Attorney General Ken Paxton.

The verdict appears to be the first clear sign that federal authorities are still investigating Paxton after he was indicted on bribery and abuse of office charges last year and subsequently acquitted by Congress.

In a June 20 ruling, the federal Fifth Circuit Court of Appeals agreed with a ruling by the Lower Western District of Texas that the state agency could not use attorney-client privilege to withhold evidence from a Justice Department investigation into “alleged misconduct by agency officers.” The appeals court also cleared the way for two agency officers to testify before a grand jury on July 2.

The statement does not name the agency, but it refers to a years-long FBI investigation and cites data and details consistent with a sealed federal case investigating allegations made by Paxton’s former top officials. In October 2020, those officials reported to federal authorities that the attorney general allegedly accepted bribes to benefit a friend and political donor, Austin real estate developer Nate Paul.

The case at issue in the Fifth Circuit’s opinion also remains under seal, but the opinion references previous orders that appear to be consistent with those in the Paxton case, including an August 2021 decision that largely rejected the agency’s attempt to narrow the scope of the investigation.

Last month, Texas Newsroom published an August 2021 order from U.S. District Judge David Ezra of the Western District that appears to be the same one referenced in the Fifth Circuit’s recent ruling. For example, the Western District’s 2021 ruling states that investigators in Paxton’s case were permitted to take “additional investigative steps” to seek “four categories of information,” including any “acts or communications planned or undertaken by Paxton or his senior associates” to “interfere with or obstruct” the federal investigation. The Fifth Circuit ruling references the same language, including the same “four categories of information.”

Ezra’s 2021 order states that the grand jury investigation “concerns Paxton’s alleged abuse of his official position and power” to benefit Paul, “as well as Paxton’s alleged efforts to thwart the investigation.” The order also states that federal officials are “investigating several potential federal crimes involving Ken Paxton,” including obstruction of justice, witness retaliation, bribery, wire fraud, and “conspiracy to commit the four offenses identified above.”

Paxton’s office did not immediately respond to a request for comment. He has denied any wrongdoing in all of his legal proceedings.

The Fifth Circuit opinion said the unnamed agency – apparently Paxton’s office – argued in court filings that Justice Department officials, while examining possible retaliation against witnesses, violated the Tenth Amendment by “attempting to oversee the hiring and firing practices of a government agency.”

Last week’s opinion, written by Trump-appointed Fifth Circuit Judge Cory T. Wilson, said federal officials are still reviewing any agency attempts to “interfere or obstruct” the federal investigation. Such communications, Wilson wrote, do not fall under the usual “seal of confidentiality” between attorney and client.

Wilson’s opinion also said the lower court “reiterated on multiple occasions” that it agreed with Justice Department officials who asserted that there was “reason to believe that evidence of the federal crimes alleged in the Justice Department’s motion is in the possession, custody, or control of current or former employees” of the state agency.

Wilson wrote in his opinion: “We cannot say that the district court erred in its decision on this point.”

The Fifth Circuit ruling is the first sign of potential trouble for Paxton after a string of recent victories, including his acquittal in impeachment proceedings and the end of his long-running prosecution on three serious counts of securities fraud. Prosecutors had agreed earlier this year to drop the fraud charges as part of a deal that requires Paxton to pay restitution to those he is accused of defrauding.

Both developments were seen as a great satisfaction for Paxton, who was once considered a political liability within his party because of his legal baggage. He has since become a leading figure in the emerging hard-line wing of Texas Republicans, which sees Paxton as a conservative warrior who has withstood political persecution. Paxton has openly entertained the idea of ​​challenging U.S. Sen. John Cornyn in the 2026 Republican primary, and his most powerful ally, former President Donald Trump, said last month he would consider nominating Paxton as U.S. attorney general if he wins a second term in the White House.

Meanwhile, Paxton continues to face a whistleblower lawsuit in state court filed by the officers who said they were wrongfully fired for reporting Paxton to law enforcement. He also faces a separate lawsuit from the state bar association, which seeks to punish him for misconduct as an attorney.